Dunleavy pulls plan to divide DHSS as opposition in Legislature mounts

Gov. Mike Dunleavy. (Photo by Matt Buxton/TMS)

Hours before Gov. Mike Dunleavy’s administration was slated to testify in front of the Senate Finance Committee on the growing mountain of concerns with the legality and process behind the proposed division of the Department of Health and Social Services, the governor announced that he has withdrawn his executive order.

“I hereby withdraw from consideration Executive Order 119, relating to the reorganization of the Department of Health and Social Services,” read a letter from the governor to Senate President Peter Micciche, a copy of which was posted by KTOO legislative reporter Andrew Kitchenman to Twitter this morning.

The Legislature had until March 21 to take up action on a special resolution that would have halted the proposal. A measure doing just that advanced out of the House Health and Social Services Committee on Tuesday with even typically Dunleavy-friendly Republicans voicing apprehension about the plan.

While the Alaska Constitution affords the governor the power to reconfigure departments through executive order, legal analysis of the proposal suggested the plan was rife with legal issues where it impermissibly attempted to change, repeal or implement state law. That along with concerns from several groups that the process was being rushed through without adequate oversight or input from affected groups had been brought into the spotlight in the House Health and Social Services Committee, which has held several hearings on the proposed division.

At the Tuesday hearing, House legislators acknowledged significant problems facing the Department of Health and Social Services but said the administration had done little to prove why dividing the state’s largest department and adding a new slate of high-paid administrators was the solution when very little else would change.

“While it is clear that changes need to be made to the operations and possibly to the organization of the department to improve services and functionality, it is not clear that bifurcation and the addition of several new high-level positions is the answer,” said House Health and Social Services Committee co-chair Liz Snyder, D-Anchorage, said on Tuesday. “Make no mistake, if we get this answer wrong the victims of the fallout most likely aren’t most of us sitting in this room today. Those negatively impacted are vulnerable Alaskan children in unsafe homes, children and families who don’t know where their next meal is going to come from, a caretaker of an Alaskan with mental health challenges who has nowhere to turn, elders facing increased uncertainty about how they will live out their golden years, and the father and his son who are struggling with addiction and finding treatment. I want to keep these Alaskans in the forefront of our minds today. We owe it to them to get this right.”

Several health groups and even the union representing the Anchorage Police Department opposed the plan, arguing that its changes and ambiguity would cause massive problems for Alaska’s health care system.

In a written statement, the governor acknowledged that there were “some technical issues identified that merit revisions to the order” and said he plans to have his administration review the changes and resubmit the executive order to the Legislature for consideration. The governor also claimed that the pushback is evidence that “there is widespread recognition … that the largest department in state government needs to be reorganized.”

None of that’s likely to satisfy the concerns with the lack of stakeholder engagement on the plan, which many testifiers told the House committee has undermined confidence in the administration.

“I’m not necessarily opposed to the proposed split in the executive order. However, I’m vehemently opposed to the manner in which this has played out. I’m asking the Legislature to slow the roll on this,” National Alliance on Mental Illness-Alaska Executive Director Jason Lessard, who was speaking in a personal capacity, told the committee during a weekend hearing. “This could be a good idea and if so, it will continue to be a good idea in six months or a year. Perhaps, an even better idea if tempered by the actual stakeholder engagement something this executive order has glaringly and offensively lacked. … I’m opposed to this flawed, reactionary and unilateral process. If it’s a good idea, prove it.”

The administration has also claimed that the division could be a cost saver for the state but much of those claimed savings are proposed under the existing structure. In fact, the plan on its own would end up costing the state roughly an additional $5 million a year in perpetuity. House Health and Social Services Committee co-chair Rep. Tiffany Zulkosky said the plan makes neither fiscal or policy sense.

“As the Legislature continues our work to diligently comb through agency budgets to find cost savings and cut programs that serve Alaskans directly, this proposal would guarantee that we’re adding top-heavy government salaries in perpetuity,” she said on Tuesday. “Cutting front-line positions like public assistance eligibility specialists, clinicians like psychiatrists at API in favor of increases to overhead expenses and leadership positions is neither a fiscal or policy practice I can support.”

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1 Comment on "Dunleavy pulls plan to divide DHSS as opposition in Legislature mounts"

  1. Jerry Troshynski | March 11, 2021 at 3:46 pm | Reply

    My suggestion, if there has to be a reorganization, is to separate the money/benefit portions of the department (Medicaid, public assistance) from the service portions (OCS, DJJ, public health, etc.). What this will reveal is that very little in general funds actually goes to the service portion, though they are often funded with federal dollars. It would give a clearer understanding of where DHSS money actually goes.

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